New rules on real estate loans – Revocation notice !!!

As of 21 March 2016, certain changes will come into effect primarily related to the raising and advising of real estate loans. The basis is the so-called EU Housing Loan Directive, which will be implemented into German law from Monday. From then on, there should be some positive changes for consumers related to housing loans.

Comprehensive counseling obligation for real estate loans


One major change is that the obligation to provide advice is extended to all persons who commercialize or broker real estate loans.

The advice must now be given in more detail and above all, the consultant must respond more to the individual and personal circumstances of the customer. This is primarily intended to ensure that the loan seekers understand the subject of real estate financing better and are actually informed about the important aspects to consider in connection with real estate loans.

From 22 June no indefinite revocation possible


A rather negative change, which also results from the EU Housing Credit Directive, is the abolition of the indefinite right of revocation, which has also become known under the name Widerrufsjoker.

So far, this “joker” implies that customers have the opportunity, for an indefinite period of time, to revoke a real estate loan that was concluded between 2002 and 2010, for example, which has an incorrect cancellation policy. From June 22, this indefinite period expires.

This applies in principle also for newly concluded real estate loans, because these can no longer be revoked indefinitely, as in the past, even with a faulty cancellation policy, but the revocation period is then only a significantly shorter period of a maximum of one year and 14 days.

Proof of expertise required for credit intermediaries


Another change resulting from the EU Directive is the future obligation for credit intermediaries to provide proof of competence. However, there is a certain protection for those intermediaries who are licensed according to Article 34 c of the Gewerbeordnung.

All other credit intermediaries, on the other hand, will have to provide a certificate of competence in the future, which is usually carried out in the form of an examination before the relevant Chamber of Industry and Commerce (IHK). This proof is intended to ensure that customers are given more qualified advice when lending a loan.